Cable TV, Web cause video-rental slump

They were once a common sight in neighbourhoods and shopping malls, but video-rental stores facing a bleak future are now diversifying their businesses to stay afloat.

My Paper visited at least five stores islandwide recently and found them to have few or no customers for extended periods of time.

One store in Hougang told My Paper that it has resorted to selling mobile-phone accessories, toy figurines and slippers in order to make ends meet.

A sales assistant, who wanted to remain anonymous, said: "We are doing this to generate revenue, because business is slow."

The stores requested not to be named, and blamed the Internet and the ease of film downloads - legal or otherwise - for their rental and sales woes.

A sales assistant from a major video-rental chain said: "Programmes offered on cable TV have been getting better over the years (as they air) the latest shows and episodes."

He added that "cable-TV subscription is cheaper than constantly renting the latest shows on DVD".

In order to woo more customers, many stores offer promotions such as season passes, which come with movie vouchers and price cuts of as much as 40 per cent.

An online industry report on the video-rental business in the United States said that rental sales plummeted from US$3.3 billion in 2009 to about US$1.5 billion (about S$1.8 billion) in 2011. During the same period, subscription services such as on-demand, Web-streaming media service Netflix experienced revenue growth from US$2.6 billion in 2010 to about US$3.1 billion in 2011.

Assistant professor Liew Kai Khiun from the Nanyang Technological University's Wee Kim Wee School of Communication and Information told My Paper that video-rental stores once served a "social function in fostering a sense of neighbourliness and familiarity" between customers and store staff.

But as media has become more convergent - with film reviews and trailers easily available online - this function is "no longer relevant", he said.